Silent Partners

How Israel Helped to Spawn Hamas

By ANDREW HIGGINS

Surveying the wreckage of a neighbor's bungalow hit by a Palestinian rocket, retired Israeli official Avner Cohen traces the missile's trajectory back to an "enormous, stupid mistake" made 30 years ago.

"Hamas, to my great regret, is Israel's creation," says Mr. Cohen, a Tunisian-born Jew who worked in Gaza for more than two decades. Responsible for religious affairs in the region until 1994, Mr. Cohen watched the Islamist movement take shape, muscle aside secular Palestinian rivals and then morph into what is today Hamas, a militant group that is sworn to Israel's destruction.

Instead of trying to curb Gaza's Islamists from the outset, says Mr. Cohen, Israel for years tolerated and, in some cases, encouraged them as a counterweight to the secular nationalists of the Palestine Liberation Organization and its dominant faction, Yasser Arafat's Fatah. Israel cooperated with a crippled, half-blind cleric named Sheikh Ahmed Yassin, even as he was laying the foundations for what would become Hamas. Sheikh Yassin continues to inspire militants today; during the recent war in Gaza, Hamas fighters confronted Israeli troops with "Yassins," primitive rocket-propelled grenades named in honor of the cleric.

Last Saturday, after 22 days of war, Israel announced a halt to the offensive. The assault was aimed at stopping Hamas rockets from falling on Israel. Prime Minister Ehud Olmert hailed a "determined and successful military operation." More than 1,200 Palestinians had died. Thirteen Israelis were also killed.

Restoring American Prosperity

Limiting Leviathan

by Brian Domitrovic

What a gift to civilization this United States of America is. If you had to count the ways, how many very big things there are in which this country has positively excelled over its over two centuries of history.

There is of course the political order watched over by our Constitution. Popular government remaining limited and respectful of rights would be a pipe dream the world over without the example of this country.

There is also the incredible tradition of social peace in a country of tens and now hundreds of millions of persons. Americans are now marking the 150th anniversary of the civil war that rent this country so badly in the 1860s. Since that time, this country has seen essentially no political violence of note, and in particular in an era—the 20th century—in which political violence and revolutionism took tens of millions of lives worldwide. 

Then there is the moral maturity this country has shown over the years, evidenced in particular by its unsurpassed tradition of philanthropy. Do you remember a few years ago, when the tsunami hit in Indonesia, and word went out over the media that the relief effort which succored several million in the aftermath of that disaster represented the largest act of relief in world history? This was actually wrong. That honor still belongs to the American-led response to the Communist-induced Russian famine of 1921, when 20 million were saved from starvation. American giving, so much of it private, has been so profuse, effective, and unselfish that we are apt to forget its major examples.All of these stunning traits, our political order, social conviviality, and moral goodness, make up, collectively, what we are wont to call “American exceptionalism”—that glorious tendency in our country, shown so many times over its history, to be true to being a good and just society.

But for all these things, there is still one other that might be the most incredible and persistent trait of American exceptionalism of them all. This is our mind-boggling tradition of economic growth and prosperity.

Do you know how much the economy of the United States grew in the one and a quarter century since the Constitution was ratified, in 1789, until the fateful year of 1913, when this country established the Federal Reserve and the income tax? 1789-1913? The number is 150-fold. The economy was 150 times larger in 1913 than it was in 1789.

The Nearly-Free University

The Nearly-Free University model would revolutionize higher education

by Charles Hugh-Smith

The key to understanding higher education in the U.S. is to grasp that it is at heart just another debt-dependent neofeudal cartel. In other words, it is just like sickcare and the national defense complex.

Each cartel shares these features:

1. Compelling PR "cover" for cartel extraction of wealth. "Healthcare" (i.e. sickcare that profits from illness, not health) is a "right." The defense industry is the bulwark of democracy, and "educating our children" is the key to future prosperity. Each portrays itself as sacrosanct.

These "Mom and apple pie" cover stories enable monopolistic exploitation: $300 million a piece fighter aircraft (replacing $54 million aircraft), $150,000 college diplomas, and "healthcare" spending that is two times more per capita than competing advanced democracies.

Ron Paul Addressed His Countrymen, Adult to Adult

Productivity and creativity are the true source of personal satisfaction

By Maura Pennington

Say what you will about Ron Paul as a political operator or orator, he offered more uplifting words on the House floor yesterday than many of our current statesmen can muster.  They weren’t sweeping remarks, at least not the kind that sweep people off their feet and into a swirling, senseless mob.  Unlike President Obama’s victory speech last week, Paul didn’t refer to the masses as “an American family” in need of a parent.  Instead, he addressed his countrymen as peers capable of understanding the role of government.  To that end, he rebuked his colleagues in Washington:

“Politicians deceive themselves as to how wealth is produced.  Excessive confidence is placed in the judgment of politicians and bureaucrats.  This replaces the confidence in a free society.”

Tribal America

On our suddenly race-obsessed politics

By Mark Steyn

To an immigrant such as myself (not the undocumented kind, but documented up to the hilt, alas), one of the most striking features of election-night analysis was the lightly worn racial obsession. On Fox News, Democrat Kirsten Powers argued that Republicans needed to deal with the reality that America is becoming what she called a “brown country.” Her fellow Democrat Bob Beckel observed on several occasions that if the share of the “white vote” was held down below 73 percent Romney would lose. In the end, it was 72 percent and he did. Beckel’s assertion — that if you knew the ethnic composition of the electorate you also knew the result — turned out to be correct.

This is what less enlightened societies call tribalism: For example, in the 1980 election leading to Zimbabwe’s independence, Joshua Nkomo’s ZAPU-PF got the votes of the Ndebele people while Robert Mugabe’s ZANU-PF secured those of the Shona — and, as there were more Shona than Ndebele, Mugabe won. That same year America held an election, and Ronald Reagan won a landslide victory. Nobody talked about tribal-vote shares back then, but had the percentage of what Beckel calls the “white vote” been the same in 2012 as it was in 1980 (88 percent), Mitt Romney would have won in an even bigger landslide than Reagan. The “white vote” will be even lower in 2016, and so, on the Beckel model, Republicans are set to lose all over again.

War In Gaza: Why Now?

Election Politics?

by George Washington

It was widely reported that Israel agreed to delay any war against Iran until after U.S. elections.

A little over a week after the election, Israel launched a "targeted assassination" against the leader of Hamas (who Haaretz called Israel's subcontractor in Gaza). That is what started the current round of fighting. Rabbi Arthur Waskow agrees that Israel started the fighting.

Professor Michel Chossudovsky notes:

On November 14,  Hamas military commander Ahmed Jabari was murdered in a Israeli missile attack. In a bitter irony,  barely a few hours before the attack, Hamas received  the draft proposal of a permanent truce agreement with Israel.

“Hours before Hamas strongman Ahmed Jabari was assassinated, he received the draft of a permanent truce agreement with Israel, which included mechanisms for maintaining the cease-fire in the case of a flare-up between Israel and the factions in the Gaza Strip.”(Haaretz, November 15, 2012)

The targeted assassination  of  Ahmed Jabari was followed by an extensive bombing campaign under Operation Pillar of Cloud.  The latter consists of a carefully planned military endeavor.

F-16 fighter planes, Apache helicopters and unmanned drones were deployed. Israeli naval forces deployed along the Gaza shoreline were  involved in extensive shelling of civilian targets.

Israel’s defense minister Ehud Barack has confirmed a scenario of military escalation, blaming Palestine for having committed acts of aggression: .

“[t]he provocations we have suffered and the firing of rockets to the southern settlements within Israel have forced us to take this action. I want to make clear that Israeli citizens will not suffer such actions. The targets are to hit the rockets and to harm the organization of Hamas. 

Anonymous Hacks Greek Finance Ministry, Finds "123456" Is Password For 37% Of All User Accounts

A joke of a country

While we have yet to go through the thousands of files that hacker collective Anonymous has just released as a result of its hack of the Greek Finance Ministry, an exploit it described as follows: "We gained full access to the Greek Ministry of Finance. Those funky IBM servers don't look so safe now, do they... We have new guns in our arsenal. A sweet 0day SAP exploit is in our hands and oh boy we're gonna sploit the hell out of it. Respectz to izl the dog for that perl candy," what we find even more amusing, if not surprising, is that of the 136 username accounts Anonymous hacked, the password of precisely 50 of them, or some 37% of all workers, is.... 123456 (full list here).

That, together with the above archival picture of the inside of the Athens Finance Ministry, explains much more about the current and future state of Greek affairs, than any idiotic Troika/IMF forecast ever could.

As for those curious just what secrets the chaotic finance ministry of the Eurozone's most insolvent country holds, the downloads are available here  and here.

Sifting Through the Wreckage

Yes, Virginia, things changed

By George Weigel

The most inane insta-pundit commentary had it that the 2012 election “hadn’t really changed anything,” what with President Obama still in the White House, the House still in Republican hands, and the Senate still controlled by Democrats. The truth of the matter, of course, is that a great deal changed, somewhere around 11p.m. EST on Tuesday, November 7, when Ohio was declared for the president and the race was effectively over. To wit:

Obamacare, the governmental takeover of one-sixth of the U.S. economy, is now set in legislative concrete, and the progressive campaign to turn ever-larger numbers of citizens into wards of the state has been given a tremendous boost — with electoral consequences as far as the eye can see.

A war in the Middle East is now almost certain, and sooner rather than later; as if the previous three and a half years of fecklessness were not enough, the cast of mind manifest in the administration’s abdication of responsibility in Benghazi will have likely convinced a critical mass of the Israeli leadership that they have no choice but to strike Iran’s nuclear facilities in self-defense. The economic chaos resulting from military conflict in the Persian Gulf (and beyond) will further deepen the European fiscal crisis while making an already weak American economic recovery even more anemic.

The children and grandchildren of November 6’s voters have been condemned to bear the burden of what is certainly an unpayable mountain of debt, and may be an unserviceable amount of debt, which in either case will be an enormous drag on the economy, even as it mortgages America’s strategic options in Asia to the holders of U.S. government bonds in Beijing.

A Country Unhinged

The Party

By Victor Davis Hanson

In the last week, it is almost as if the entire American moral landscape has been turned upside down in eerie fashion — in matters that vastly transcend fornication and adultery. The Petraeus-gate matter is the stuff of tabloids now; but soon the real issues relating to when and what Eric Holder knew, and by extension the president, and how exactly Benghazi (the crime of indifference to the besieged, the cover-up of the truth, the actual mission of our consulate and annex) fits into this labyrinth of deceit, both petty and fundamental, may overshadow the present sensationalism.

Nothing seems real anymore, not preelection federal data on jobs or food stamps or the release of such “facts”; not foreign-policy information like an Iranian attack on a drone; not the supposedly competent federal relief in response to Hurricane Sandy. Even Saddam Hussein’s plebiscites could not achieve margins like the 19,605 to 0 we saw in 59 Philadelphia precincts. Does anyone care?

Stalin’s Sock Puppet

A new play makes Walter Duranty’s journalistic mendacity relevant to our own time

BY STEFAN KANFER

He had two faces, one leg, and no principles. He was a sycophant, a dabbler in the occult, in drugs, in sexual orgies. He was a habitual liar, a serial adulterer, a lout. Of all Generalissimo Joseph Stalin’s useful idiots, he was the most useful, and the most idiotic. And he was one of the most prominent journalists of his time.

Indeed, Walter Duranty not only served as the New York Times’s point man in Moscow, he won a Pulitzer Prize in 1937 for his mendacious reportage. Acting simultaneously as “objective” newspaperman and apologist for the Bolsheviks, he denied the Holodomor, Stalin’s deliberate, deadly starvation of some 12 million Ukrainians, which he knew to be true. In dispatch after dispatch, Duranty acted as Stalin’s sock puppet, labeling eyewitness accounts of mass murder as “malignant propaganda.” Seven decades later, the Pulitzer committee and the Times acknowledged as much. Yet neither institution has seen fit to revoke the award.

This flamboyant self-promoter would make an ideal subject for the stage, and it’s a wonder dramatists have ignored him for so long. Happily, the wait is over. Scenarist Sheryl Longin has collaborated with novelist and polemicist Roger L. Simon to create a compelling two-act play, The Party Line.

Shuttling between the Soviet Union and contemporary Europe, their tragedy focuses on Duranty. But it also includes Sid Brody, a composite of the reporters who started by toeing the Communist Party line and ended by exposing Bolshevik atrocities. Vaulting into the future, it then introduces several memorable characters, including Duranty’s son Michael (a fictitious person, since the journalist’s real son disappeared years ago); Michael’s lover, the soon-to-be-assassinated Dutch politician Pim Fortuyn; and Stockton Rhodes, a credulous CNN correspondent.

Egyptian Idol

The Salafi threat to blow up the pyramids is nothing new

BY IAN STRAUGHN

In March 2001, Mullah Omar and the Afghan Taliban destroyed the Buddhas of Bamiyan, exploding the statues and reducing to rubble some of Afghanistan's most important cultural relics. That act seemed to epitomize the cultural intolerance of the Taliban regime but also drew attention to the ways in which cultural heritage preservation has become used as a measure of civilized behavior of states in an era of global cosmopolitanism. For those concerned about the future of the world's antiquities, this week another threat emerged on the horizon. In an interview with Egyptian Dream TV over the weekend, Salafist leader Murgan Salem al-Gohary called on Muslims to destroy the Giza pyramids and the Sphinx as a religiously mandated act of iconoclasm. "The idols and statutes that fill Egypt must be destroyed. Muslims are tasked with applying the teachings of Islam and removing these idols, just like we did in Afghanistan when we smashed the Buddha statues," said Gohary, who claims to have participated in the destruction of Buddhas in Afghanistan and was arrested on several occasions under the Mubarak regime.

Can Central Banks Be Tamed?

A return to sound money

by John P. Cochran

Austrian economists have, since the latest boom-bust cycle and financial crisis, called for a critical reexamination of the "rationale of central banking" by emphasizing the role of central banking in generating business cycles. The argument is well summarized by Roger Garrison:

The decentralization of money, as proposed by Hayek (1976) and explored by Selgin and White (1994), has an increasing strong claim on our attention. Concerns with political feasibility should be separated from the more fundamental reconsideration of a market based money supply. In light of our continuing experience with a bubble-prone central bank, we might well anticipate that a comparative-institutions analysis would favor a market solution to our money and credit problems. At the very least, a better understanding of the workings of a decentralized monetary system would help identify the perils and pitfalls of continued centralization. ("Interest-Rate Targeting during the Great Moderation: A Reappraisal," p. 199, links added)

Has Merkel decided to pay up for the euro ?

If Germany is writing the cheques, Germany will set the rules

By Philip Stephens

The other day I heard someone say that Angela Merkel intends to fight next autumn’s German election as the chancellor who saved Europe. Those still worried about the future of the euro will be reassured by her confidence. The crowds of striking workers who took to Europe’s streets this week to protest against austerity are less likely to applaud.

Not too long ago, Ms Merkel faced criticism for hesitancy and indecision. Radoslaw Sikorski, Poland’s foreign minister, made a pilgrimage to Berlin to demand she pick up the reins of leadership. It had been a long time since a Polish politician had called for a more assertive Germany.

Ms Merkel is now being nothing if not assertive. The individual ingredients in her recent speech to the European Parliament – fiscal rectitude, improved competitiveness, deeper financial integration and eurozone economic governance – were scarcely groundbreaking. Together they represent Germany’s conditions for securing the future of the single currency. Berlin has decided that, one way or another, it cannot avoid picking up the bill. So it wants to set the terms. Austerity now and shared decision-making later is the price others must pay for German solidarity.

The euro is not out of the woods. A spat between eurozone governments and the International Monetary Fund has underlined the scale of the economic crisis still engulfing Greece. The dispute itself – about whether Greece’s debt to GDP ratio should fall to 120 per cent by 2020 or 2022 – was surreal. Everyone knows that Greece will have to write off another hefty slab of its debt. The question is one of timing.

A Blueprint for Syriza

Go Figure, The Poorest Place In Europe Is Run By Communists

By Simon Black

Ah Moldova… the poorest country in Europe, which just so happens to have had a Communist party majority in its parliament since 1998.

These two points are not unrelated.

Despite having achieved its independence from the Soviet Union over 20 years ago, the state is still a major part of the Moldovan economy…from setting prices and wages to media, healthcare, agricultural production, air transport, and electricity.

Under such management, it’s no wonder, for example, that Moldova has to import 75% of its electricity. It is the exact opposite of self-sustaining.

The government does a reasonable job of chasing away foreigners as well.

Agriculture is the mainstay of Moldova’s economy… and while on one hand they say “we welcome foreign investment in agriculture,” on the other they say “foreign investors cannot own agricultural property.” It’s genius.

National Socialism with Chinese Characteristics

Meet He Di, the insider trying to save the Chinese Communist Party from itself

BY JOHN GARNAUT

Two years ago, one of China's most successful investment bankers broke away from his meetings in Berlin to explore a special exhibit that had caught his eye: "Hitler and the Germans: Nation and Crime." In the basement of the German History Museum, He Di watched crowds uneasily coming to terms with how their ancestors had embraced the Nazi promise of "advancement, prosperity and the reinstatement of former national grandeur," as the curators wrote in their introduction to the exhibit. He, vice-chairman of investment banking at the Swiss firm UBS, found the exhibition so enthralling, and so disturbing for the parallels he saw with back home, that he spent three days absorbing everything on Nazi history that he could find.

"I saw exactly how Hitler combined populism and nationalism to support Nazism," He told me in an interview in Beijing. "That's why the neighboring countries worry about China's situation. All these things we also worry about." On returning to China he sharpened the mission statement at the think tank he founded in 2007 and redoubled its ideological crusade.

He's Boyuan Foundation exists almost entirely under the radar, but is probably the most ambitious, radical, and consequential think tank in China. After helping bring the Chinese economy into the arena of global capital through his work at UBS, He now aspires to enable Chinese people to live in a world of what he and his ideological allies call "universal values": liberty, democracy, and free markets. While the foundation advises government institutions, including leaders at the banking and financial regulators, its core mission is to "achieve a societal consensus" around the universal values that it believes underpin a modern economic, political and social system.

"This is the transition from a traditional to a modern society," He says.

The New York Times and Socialism

Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings

by James E. Miller

In lieu of the election of Socialist President Francois Hollande and a Socialist Party collision as the majority in France’s Parliament, the New York Times recently asked “what does it mean to be a Socialist these days, anyway?”   According to The Grey Lady, socialism today is “certainly nothing radical” and simply meant the “the emancipation of the working class and its transformation into the middle class” during its heyday.  Essentially the article categorizes the contemporary socialist as one who is a rigorous defender of the welfare state.  The piece quotes French journalist Bernard-Henri Levy as saying “European socialists are essentially like American Democrats.”  It even accuses center-right political parties in the West of being quite comfortable with socialism’s accomplishments.

So is the New York Times correct?  Is socialism just a boogeyman evoked by the “fringes” to scare the public into questioning the morality and efficiency of the welfare state?

Going by the New York Times definition, socialism is just another word for social democracy.  But of course the word socialism never really referred to just welfare entitlements.  Properly defined, socialism is a society where the complete means of production and distribution of goods are solely in the hands of the state.  It is also a system defined by the absence of private property.  According to famed socialist and author Robert Heilbroner:

Name the author: "How The Capitalists Are Trying To Scare The People"

Hint. It was not said yesterday in Europe, or today somewhere in the US. It was said on May 19, 1917...

Name the author:

No socialist has ever proposed that the “tens of millions”, i.e., the small and middle peasants, should be deprived of their property (“made to abdicate their property rights”). Nothing of the kind! Socialists everywhere have always denied such nonsense. Socialists are out to make only the landowners and capitalists “abdicate”. To deal a decisive blow at those who are defying the people the way the colliery owners are doing when they disrupt and ruin production, it is sufficient to make a few hundred, at the most one or two thousand, millionaires, bank and industrial and commercial bosses, “abdicate” their property rights. This would be quite enough to break the resistance of capital.

Further hint: here is the full speech:

US shifts to Brazilian standards

Painful and "Unexpected"

By Martin Hutchinson 

President Barack Obama's victory clarifies the political and economic landscape. Unfettered in his second term, he will now be able to pursue the economic policies he truly favors. To see their result, we can look at a country with an overlarge government, low domestic savings, endless "stimulus" spending financed by its development bank, relatively high inflation, huge inequality and accompanying tax evasion, state meddling in major industries, which trade off their political connections, a high level of corruption and an education system that does a poor job of preparing its citizens for the high-tech world. 

That country is Brazil. Sadly, Brazilian economic policies will if pursued for two decades or so produce in the United States a Brazilian standard of living. 

Obama's opponents during the election campaign accused him of wanting the United States to be more like the Western countries of the European Union. Certainly the EU's all-powerful bureaucracy and its commitment to various "elite" projects such as fighting global warming and universal healthcare appeal to him. But in reality, the United States is a very different environment from Western Europe, with a different demographic profile and many attitudes that have derived from its New World provenance. 

The Law of Demand

One of the most important ideas in the social sciences

by ART CARDEN

The law of demand is a simple principle with profound consequences and incredible explanatory power. The law is so simple, it can be expressed as haiku:

All else held constantquantity demanded fallswhen the price rises.

When tomato prices rise, people eat fewer tomatoes. When tomato prices fall, people eat more tomatoes. What is true of the tomato market is true of other markets as well. The law of demand applies to markets for goods like tomatoes and to markets for services like auto repair and landscaping.

The law of demand applies to more than just the goods and services we buy, however. We can think about having a “demand” for all sorts of things, like a demand for speed and comfort while driving. When fast driving becomes riskier, people do less of it. When fast driving becomes safer, people do more of it.

Consider something else that has been controversial recently: the demand for convenient communication. With the diffusion of cell phones (and smart phones especially), communicating via email, text messages, Facebook, Twitter, and other applications has never been easier. The siren song of email, the Internet, and text messages can be strong, even for people who are driving at the time. Let’s consider first how the law of demand helps us explain why people text while driving and second the implicit theory underlying laws against texting while driving.

Fiscal Cliff: Sense and Nonsense

No Solution before a major crisis

by Mario Rizzo

The above table is from the November 8th issue of the Wall Street Journal. The figures for the fiscal cliff consequences are usefully stated for next year and not for the next nine years as those who want to suggest that the numbers are truly impressive (or want to scare children) typically use.

Consider the following facts or likely scenarios:

1. If the Congress and the White House do not agree on something before the end of the calendar year, the  first-year consequences will be as the table indicates.  But how likely will they fail to come to even an illusory agreement for the entire year, let alone the next nine years. Not very likely, I should think.

2. Note how the consequences are stacked in “favor” of tax increases and not spending cuts. The “scheduled” spending cuts amount to only $136 billion out of a federal burget of about $7 trillion for next year. The tax increases are $532 billion. The Democrats are horrified that half of these come from domestic spending. The Republicans are horrified that the other half comes from defense spending.

3. It is true that many federal workers under this scenario would face pay cuts of about 8-9%, presumably to ensure that substantive programs can be cut less. These have the political effect of pinching well-organized people immediately who will then let us all know how much they are suffering.